To be truly net-zero, buildings must buy 100% renewable energy, global council says – GWC Mag

Dive Brief:

• For a building to transition from a state of net-zero readiness to truly net-zero operational status, it must buy 100% renewable energy and utilize operational performance data to make facilities management more energy and cost efficient, says a recent report from the World Business Council for Sustainable Development. 
• For facilities managers, achieving net-zero buildings will require proactive monitoring and performance improvement through frequent tuning, which is a change from the current norm of scheduling maintenance and procurement with “planned preventative checks” where operational performance receives little to no attention unless there is complete failure, the report said.
• The absence of standardized measurements for emissions reporting and a lack of clarity around carbon compliance exacerbate the challenges building operators and facilities managers are grappling with as they work to meet complex regulatory requirements and net-zero goals, industry experts say. 

Dive Insight:

WBCSD’s net-zero operational carbon buildings report, released November, calls for a clear and globally consistent definition of net-zero buildings. Businesses, portfolio owners and investors who have made corporate net-zero commitments lack “a single robust certifiable definition” for what constitutes a net-zero building, the global organization said. 

Once the market can consistently distinguish between buildings that achieve net-zero status and those that do not, assigning a higher value to net-zero buildings can attract investments and drive market growth, the report notes.

In an interview, Frank Cuomo, general manager at Consolidated Edison, said the market has not settled on how to measure carbon compliance, carbon reduction and similar benchmarks. “Where does it stop? Does it stop with the building wall? Do you count fugitive emissions of the utility? How do you account for the carbon?” he asked.

Cuomo, who manages the utility provider’s steam service, explained that “If a building says it’s net-zero, does it mean they are buying enough renewable energy to offset their carbon? Or does it mean they produce no carbon? It’s unclear what the rules are around that. There’s a lot of terms and nomenclature that’s used [and] there’s no agreed-upon standard.” 

WBCSD says a combination of the performance of a building and that of the energy infrastructure to which it connects is critical to the definition of a net-zero emissions building. This transition is two-fold.

The demand-side transition involves a building relying entirely on its on-site renewable energy. To be net-zero ready, that building must significantly reduce its energy demand to align with 100% renewable energy. Yet, achieving this outcome is not feasible for the majority of global buildings, WBCSD notes. 

On the supply side, buildings can attain net-zero operational emissions by procuring 100% renewable energy through a tariff or power purchase agreement that is “demonstrably additional to national renewable obligations,” the report states. Alternatively, they can purchase carbon offsets that meet a recognized international standard to counterbalance residual emissions. The WBCSD highlighted the ISO Net Zero Guidelines, which state that offsets should only be used when no other emissions reduction alternatives remain and that only offsets that counterbalance residual emissions should count towards an organization’s net-zero targets.

The final climate disclosure rules, which the U.S. Securities and Exchange Commission expects to release in April 2024, will add a layer of complexity to “what’s on the plates of building engineers and property managers,” said Bryan Bennett, CEO of Cortex Sustainability Intelligence. Even as the industry plans to significantly reduce emissions through measures like carbon sequestration, the immediate priorities of property managers and facilities managers are to meet the demands of tenants and investors, Bennett noted. “We’re finding that our clients are really focused on 2024 and 2025 goals. Most of our clients are focused as much on net-zero by 2040 or 2050, but that’s just so far away. Some of the individuals working in these organizations won’t even be there in 2040 or 2050,” he said.  

For buildings in operation to achieve net-zero emissions, they must secure facilities management contracts that explicitly mandate and encourage managers to proactively monitor operational performance and contribute to achieving and sustaining low-carbon operations, WBCSD’s report states.

Meanwhile, the Biden Administration has proposed defining a zero-emissions building as one that uses 100% clean energy, adheres to stringent energy-efficient guidelines and avoids on-site emissions. The U.S. Department of Energy is expected to release this proposed definition in January 2024. 

“There’s much renewable energy coming online that the market can facilitate. The more it comes online, the less it will be charged at a premium,” said Brent Trenga, North America director of sustainability at Kingspan. “More [property] owners are setting Scope 1, 2 and 3 emissions targets, which are competitive. And large owners, lessees and facilities management groups are under pressure to understand and disclose their impacts, so everything is moving in the right direction.”